So a strange thing happened at EthTrader the other day, specifically, the announcement thread about the [drumroll]

Stanford Center for Blockchain Research

Here's the subtitle from Stanford's own announcement: "The new center will address blockchain’s practical, LEGAL and societal challenges, and develop a curriculum to facilitate its use across a variety of fields and applications." (captions ours)

Excited by the intersection of all things legal and BlockTech, we immediately wrote a note of congratulations and genuine hurrah, but at the same time, we also raised the need for more foundational socio-legal theoretical work to be developed around Ethereum/Blockchain.

What we're talking about are foundational, ontological disconnects between EF/Vitalik & "the law" over things like jurisdiction, contract, "law," "smart contracts" as self-sustained "legal systems," et al. In casual usage, as heuristic devices, these are appropriate "by way of analogy" or "by way of illustration" because these concepts seem relatable to most people.

There are many ways of thinking/strategizing about the utility of conceptual relatability, which is fine, but in this crucial moment---our collective push towards global adoption of BlockTech---we think the legal terms' utility is far lower than their propensity to mislead. Further, when these terms/legal forms are presented unqualifiedly, as core premises on which arguments for Blockchain adoption are then built (as Vitalik continues to do as most recently as two days ago at Cornell) then things start getting dicey. In light of Ethereum's global stature, market cap, and thousands of subsidiary projects, continuing casual usage of terms like "smart contracts" as "self-sustained legal systems" should start to make every lawyer who loves Ethereum squirm.

EthLawyers Should Know Better Than This

This isn't a diss at Vitalik -- a young genius who can't be expected to be studying Law as Code in his overabundant free time. But we are raising many eyebrows and pointing them straight at Vitalik's lawyers.

Translating this into language that Cryptonaires can understand, usage like this makes smart lawyers squirm, and when smart lawyers squirm, smart investors flee. When investors flee, your Coinbase and "hyper-volatile asset class can drop to zero," as Vitalik has expressly warned.

Please understand that this is not just about "correct" or "incorrect" usage of terms. Usage is indicative of overall posture, and it's also a reflection of the depth of your bench and strength of your supporting crew. Misusing legal forms suggests that you're on shaky legal footing. Not strictly doctrinally; not strictly institutionally. On shaky legal footing. Period. In law, when the stakes are this high, it's that basic. Use legal terms correctly, use Legalese creatively, elide usage altogether, and you can continue to build your empire. Misuse terms in such a fundamental way that they start to merely represent faint symbols of potential threats to core sovereign interests, and you paint an even bigger target on your back.

It was ok-ish to see this type of usage/posture even six months ago, but by mid-2018, the hope was that the Blockchain community would have been offered enough exposure to multi-dimensional "regulatory friction" (globally and hyper-locally, and regionally, and institutionally, and nationally, and on multiple other levels) such that everyone sobered up a bit and began to appreciate that maybe Blockchain's threat to "law's sovereignty" was going to present a bit of a roadblock. The hope was that if one didn't know what "law's sovereignty" even means, they'd invest resources in finding out, given that newfound fortunes depended on BlockTech playing nice within those sovereign realms, alongside those sovereign realms, or otherwise remaining imperceptible to those sovereign realms.

Less Legalese, Please!

Now that the proverbial cat is out of the bag, usage of legal forms and legal rhetoric is being watched and analyzed even more closely by the world's many different governance technicians. What's the message you want to send them? Whatever it is, say it, just avoid Legalese as much as possible. The Ethereum community has many minds, and many disagreements, which is healthy and good, but everyone who cares about the vast untapped potential of Ethereum (including, of course, VB) must understand that Ethereum thought leaders' continued misuse of foundational legal constructs is inevitably serving as a barometer of the sophistication of the legal strategists around around the EF and around particular Ethereum projects. It doesn't matter how fancy the law firm or how impressive the roster; if you're using bad code, your programs won't compile, and you open yourself to multiple attack vectors. If anyone is expected to have that coursing through their DNA, it's the Ethereum community. And yet ...

We have no idea who these legal strategists are for Vitalik, but this is what their client's Legalese is signaling to particular governance communities (and those communities' readily-observable response):

Buterin: It seems that "law" is one of those things that the Blockchain can "disrupt."

Law: If you so much as dare to displace, let alone "disrupt," our primacy, you will be crushed!

Please note the deliberate use of the word "disconnect," above. Buterin probably doesn't intend to signal that he's targeting "the law" or any particular legal institution when he's talking about "smart contracts," despite his many shout-outs to crypto-anarchy and other forms of "techno-disruption" (whatever that even means any longer). But it's definitely what "the law" fears, and hence, hears.

You Say "Smart Contract," And I Say ... "Lock Him Up!"

Lawyers being lawyers and risk averse and professionally-trained to anticipate worst case scenarios means a higher chance of overreaction and "over-regulation" to a perceived threat even if the chance of it materializing into an existential threat is low or non-existent. For self-proclaimed game-theoreticians, how this obvious observation about individual/institutional self-interest, path-dependence, cartel-formation, etc. hasn't yet crept into Vitalik's power point slides (in the form of redaction of the unnecessarily risky/provocative/bellicose usage of legalese, and replacement by something expressly non-threatening and sui generis to Ethereum) is frankly astounding.

It's not a "smart contract" you're creating, nor a "self-sustaining legal regime." Call them "smart unicorns," and keep calling them "DAOs" and you win back the freedom of action you need to allow the developer community to refine the elusive killer app that takes the world by storm because of its hyper-utility.

The point is not whether a given "smart unicorn" is actually a contract or not. The answer, as every lawyer on this thread should know (except maybe the Germans) is ... "maybe." The point is not whether Vitalik/EF intend to be "risky/provocative/bellicose" vis-a-vis "the law" when talking about "smart contracts." The answer, as every lawyer on this thread should know (except maybe the lawyers taught by Germans) is ... "maybe."

The point is that mere usage of legalese in this context serves particular signaling functions, and the current signals constitute a major risk factor to Blockchain/Ethereum's continued growth. Perhaps the folks who downvoted our comment into oblivion haven't been reading the global headlines, but the disconnect we're spotting is real, it's material, and it's growing.

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To Recap:

(1) The disconnects above are major barriers on Ethereum's continued road to success. The good news is that they're relatively easy to overcome with a better strategy and clearer messaging. The bad news is that the Blockchain community seems so headstrong and self-assured at the moment, that WE'll need to be smacked with a serious roadBlock and then come across a heavy Chain slung across that road before anyone appreciates the need for a smoother/smarter/easier adoption course.

(2) "Phrasing!" as Archer reminds us, isn't just a need area in Ethereum's legal strategy. Each of the lessons above applies broadly to every Blockchain development project, without exception.

(3) The "disconnects" we're talking about aren't just at the superficial level of "Whether/how Ethereum should be regulated, or COL/COF, or dispute resolution, etc." Instead, we are talking in far more structural terms. Like, does Vitalik (meaning, do his lawyers) understand how incredibly fluid and contested and multivariate a concept "jurisdiction" is, even in its most "basic" or "simple" forms? Does the EF appreciate what their usage of terms like "legal" and "jurisdictional" signals to people who do global governance, across the entire fluid spectrum of that field, from the "hyper-local" to the "meta-global"? Just to simplify this, are Vitalik's lawyers explaining to him that his usage of particular legal terms and legal forms is tantamount to picking a totally unnecessary fight with some of the world's most powerful cartels---the world's law/governance networks?

(4) Judging from usage, the answer to the last question in #3 seems to be "no." Again, this is not a critique of Vitalik (vis-a-vis his lawyers, we really hope you read this as more of a constructive critique, despite the teaser title above -- just needed to get your attention!). We're giving our sense of the optics here. His lawyers may well be advising Vitalik to refrain from making unnecessary allusions and analogies to legal forms, to refrain from trespassing on "legal turf" unnecessarily (similar, no doubt, to the advice of Trump's or Musk's lawyers). Being the "disruptor" that he is, Vitalik may not care, which is his right. Alternatively, it may well be that all of the above has already been "debated, asked & answered" and what now we're seeing is actually a deliberate attempt to foment a dialectical rupture between the status quo and the new kids on the block. If that's the case, it may explain why Vitalik sent out his Tweet warning everyone about the "hyper-volatile asset class that can drop to zero at any point."

But, and this is key, if this is the first time that Vitalik hears about some "rupture" that his casual usage of Legalese may potentially unleash, then the lawyers who are advising him aren't doing their job. Vitalik: we get that you're the Fresh Prince of Trustless Processing, but, ironic as it may seem, you gotta process the message above on blind trust.

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To Close: The questions above are the big theoretical and concrete institutional questions that everyone on the EthLaw thread should be asking and thinking about, continuously. What sort of a threat (broadly-construed / jurisdictionally-construed) is Blockchain posing to dominant incumbents; what sort of value is it offering to different institutional actors across these various jurisdictional planes? How can the Blockchain community convey its clearest value proposition, a maximum social-utility argument, that is so unimpeachable, so apolitical, so non-threatening that virtually everyone in the world comes to embrace it, including the regulators, and the regulators' regulators, and so on from there.

The greatest irony of the downvotes on the earlier thread? The most vicious attacks came from someone with the handle "EthLaw" -- cute name, but really bad faith. Welcome back to law school, EthLaw, and everyone else who's still scratching their head after reading this post. Rule No. 1, assume nothing; question everything. Rule No. 2, the folks / institutions referenced in the OP understand exactly what's coded into the Legalese above. Rule No. 3, if your lawyers don't get what's written above, then you need better lawyers.

(Yoichi: not directly Ethereum, but a material for seeing how the legal system works in Japan on cryptocurrency.)

In Japan, at least five website owners had (their places? machines?) searched for deploying a cryptocurrency miner (coinhive) that mines cryptocurrency on the visitor's web browser. Some have already been prosecuted.

This applied some new items in the penal code, which were originally created against computer viruses and malware.

The news article contains different opinions. "Video ads sometimes consume more CPU. It's not understandable that this is suddenly considered as crimes." "The general public cannot imagine their machines being used as a tool of other people. This and ads (that acquire user information without permission) are both quite wrongful." "The only way to avoid being considered illegal would be to give explanations and to get permissions from the end-users."